Saturday, January 09, 2010

What the U.S. Can Learn From Iran About Markets

From "Tackling the Organ Shortage," in today's WSJ by Alex Tabarrok:

Millions of people suffer from kidney disease, but in 2007 there were just 64,606 kidney-transplant operations in the entire world. In the U.S. alone, 83,000 people wait on the official kidney-transplant list. But just 16,500 people received a kidney transplant in 2008, while almost 5,000 died waiting for one.

Only one country, Iran, has eliminated the shortage of transplant organs—and only Iran has a working and legal payment system for organ donation. In this system, organs are not bought and sold at the bazaar. Patients who cannot be assigned a kidney from a deceased donor and who cannot find a related living donor may apply to the nonprofit, volunteer-run Dialysis and Transplant Patients Association (Datpa). Datpa identifies potential donors from a pool of applicants. Those donors are medically evaluated by transplant physicians, who have no connection to Datpa, in just the same way as are uncompensated donors. The government pays donors $1,200 and provides one year of limited health-insurance coverage. In addition, working through Datpa, kidney recipients pay donors between $2,300 and $4,500. Charitable organizations provide remuneration to donors for recipients who cannot afford to pay, thus demonstrating that Iran has something to teach the world about charity as well as about markets.

The Iranian system and the black market demonstrate one important fact: The organ shortage can be solved by paying living donors. The Iranian system began in 1988 and eliminated the shortage of kidneys by 1999. Writing in the Journal of Economic Perspectives in 2007, Nobel Laureate economist Gary Becker and Julio Elias estimated that a payment of $15,000 for living donors would alleviate the shortage of kidneys in the U.S. Payment could be made by the federal government to avoid any hint of inequality in kidney allocation. Moreover, this proposal would save the government money since even with a significant payment, transplant is cheaper than the dialysis that is now paid for by Medicare's End Stage Renal Disease program.

The world-wide shortage of organs is going to get worse before it gets better, but we do have options. Presumed consent, financial compensation for living and deceased donors and point systems would all increase the supply of transplant organs. Too many people have died already but pressure is mounting for innovation that will save lives.

MP: The chart above displays data from the United Network for Organ Sharing, and shows that the number of candidates on the waiting list for a kidney keeps increasing, and went above 83,000 in 2009 for the first time, while the number of kidney transplant operations has remained flat at between 16,000 and 17,000 for the last five years. As recently as 1992, there was about a 50% chance of receiving a kidney for those on the waiting list, but those chances keep dropping every year, patients on the waiting list now have only a one-in-five chance of receiving a kidney.

Given current trends, the future looks pretty grim for those on the kidney waiting list, and the current system that makes it illegal to pay or receive compensation for a kidney is clearly not working. Just ask the estimated 5,000 American families who lost a loved one on the waiting list in 2009 due to the critical kidney shortage.


At 1/09/2010 2:31 PM, Anonymous Anonymous said...

I've often wondered why we have all of these blood drives. There's a near constant "drastic shortage" of blood. If you pay people for their blood (really, you're paying for their time) there would be no shortage.

At 1/09/2010 7:22 PM, Blogger Unknown said...

Is it worth becoming an Iranian citizen for this single benefit?
Of those in the US, how many are on the waiting list that cannot afford the operation?

At 1/09/2010 8:11 PM, Blogger sethstorm said...

When money and non-replaceable(read: not blood or skin cells, but things like full kidneys, hearts, etc.) vital organs cross, informed consent or proper post-op medical care is slim-to-nonexistent.

One year care and $1200 is just a death sentence in disguise.

I wonder if those markets consist primarily of "unwilling participants" like dissidents and common criminals(such as with China). That is, DATPA being the minority of all organ harvesting in that country.

At 1/09/2010 8:53 PM, Anonymous Lyle said...

In the book nudge there is a simple suggestion to solve this without going to the extreme of Iran. Change the default to be you donate organs unless you opt out. This is a nudge in the right direction without making a choice for anyone unless they make a choice. In otherwords the back of the drivers license would have a box that could be checked to say I do not wish to be an organ donor, unless checked you are one, opt out not opt in.

At 1/09/2010 10:38 PM, Anonymous Anonymous said...

With that kind of demand vs. supply and the amount of money spent on treatment and dialysis, I'm surprised some biomedical firm hasn't yet built a workable implantable artificial kidney or has figured out how to substitute an animal kidney or some kind.

At 1/10/2010 8:40 AM, Blogger Unknown said...

As the death toll from the organ shortage mounts, public opinion will eventually support an organ market in the United States. Changes in public policy will then follow.

In the mean time, there is an already-legal way to put a big dent in the organ shortage -- allocate donated organs first to people who have agreed to donate their own organs when they die. UNOS, which manages the national organ allocation system, has the power to make this simple policy change. No legislative action is required.

Americans who want to donate their organs to other registered organ donors don't have to wait for UNOS to act. They can join LifeSharers, a non-profit network of organ donors who agree to offer their organs first to other organ donors when they die. Membership is free at or by calling 1-888-ORGAN88. There is no age limit, parents can enroll their minor children, and no one is excluded due to any pre-existing medical condition.

Giving organs first to organ donors will convince more people to register as organ donors. It will also make the organ allocation system fairer. Non-donors should go to the back of the waiting list as long as there is a shortage of organs.

At 1/10/2010 9:28 AM, Blogger QT said...

There is another option...prevention. Kidney failure is one of the primary complications of diabetes. Patient education and monitoring can reduce the risk of kidney failure, diabetic rhetinopathy, amputation, etc. Additionally, one might also consider prevention of diabetes through diet and exercise.

WRT kidney transplantation, another option that has worked well is donor matching where a patient with a willing donor who is not match is matched with another patient in the same situation. There is no money involved and the entire process is conducted through the doctor.

At 1/10/2010 11:59 AM, Blogger Cristy at Living Donor 101 dot com said...

I encourage a thorough reading of Ghods research studies on the Iranian organ market, not to mention the new study by Taheeri in "clinical transplantation" before heralding their program as a success. Yes, they have eliminated their wait list, but their 'donors' (aka kidney sellers) have suffered a huge decrease in quality of life as well as income. As in the U.S., the system works splendidly for everyone except the living donors.

At 1/11/2010 7:50 AM, Anonymous geoih said...

Quote from Lyle: "Change the default to be you donate organs unless you opt out."

That's what we need, defacto government ownership of our bodies. That will go fine with the defacto government ownership of our liberty and property.

At 1/11/2010 1:01 PM, Anonymous Anonymous said... the problem with the number of transplants solely an issue with kidney supply? Or is there also a shortage of doctors and other transplant facilities?

It won't do any good to increase organ supply if the people who do the work are in short supply as well.

At 1/13/2010 12:26 AM, Anonymous Anonymous said...

The US did at one time have a payment system for blood. And the only people who were interested in selling their blood were winos and druggies. The quality of their blood rendered it unfit for use.

The current system of donors is a direct result of the failed market system in blood. Donors tend to have healthy lifestyles and disease-free blood, druggies don't.

Plus, when blood was being purchased, the experience of sharing a couple of hours of quality time with blood sellers kept the donors away from the collection centers.


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